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CII Institute of Logistics

PGDSCM & Certificate Programs
Semester-end Examination June 2011


This is a strategy for inventory management in which raw

materials and components are delivered from the vendor
or supplier immediately before they are needed in the
manufacturing process.
a) Supply of raw materials process
b) Just in time
c) Supply chain management
d) Logistics management


In this method, the required quantity is withdrawn by the

final process centre from the previous process work centre
and in turn that process work centre withdraws the
required quantity from its previous centre and so on.
a) Pull system
b) Push system
c) Closed system
d) Open system


The systems and processes of maintaining the appropriate

level of stock in a warehouse is termed as
a) Project management
b) Process management
c) Warehouse management
d) Inventory management


This is the average amount of inventory used to satisfy

demand between receipts of supplier shipments.
a) Safety inventory
b) Seasonal inventory
c) Cycle inventory
d) Pipeline inventory


These are the costs associated with loading, unloading and

handling of goods and are considered as variable costs of
transportation decisions.
a) Inventory cost
b) Facility cost
c) Processing cost
d) Transportation cost

Time: Three Hours

Marks: 100
Part A
Answer all questions (10 x 1 = 10 Marks)

The flow that involves movement of goods from a supplier

to a customer, through the manufacturer, distributor and
retailer is the
a) Product flow
b) Information flow
c) Financial flow
d) None of the above


This level of organization is concerned with shorter term

decisions such as purchasing and manufacturing decisions.
a) The strategic level
b) The tactical level
c) The operational level
d) The organizational level


The level of coordination on which production decisions are

coordinated among the plants of an internal supply chain is
referred to as
a) General plant coordination
b) Plant coordination
c) Multi plant coordination
d) General coordination


Arrange the steps involved in demand forecasting in proper

Nature of forecast
Determinants of demand
Testing accuracy
Nature of product
Choice of techniques
Analysis of factors & determinants


10. .. is the process of planning, implementing,

and controlling the efficient, cost effective flow of raw

materials, in-process inventory, finished goods and related

information from the point of consumption to the point of
origin for the purpose of recapturing value or proper
a) Returns management
b) Supply chain management
c) Logistics management
d) Reverse logistics
Part B
Answer any four (4 x 15 = 60 marks)
1) Organizations are increasingly outsourcing supply chain
functions to 3 PL service providers. Analyze the role of 3PL
service providers and the criteria required for the success
of such operations.
2) Explain the concept, need and importance of Demand
3) The activities of inventory management involve identifying
inventory requirements, setting targets etc. what are
pitfalls in inventory management while performing the
4) With the advent of Just in time practices by the companies,
do you still think warehousing is an important function in
supply chain management? Justify.
5) Contemporary supply chain management depends on
technology and visibility of information across the chain.
Elucidate with an example.
6) What are the three decision phases in the supply chain?
Part C
Case Study

(30 marks)

Kun Automobiles specializes in the manufacture of passenger,

goods transport and other utility vehicles. In 2000-2001, the
turnover of the firm was around 800 crore with a net profit of
Rs. 50 crore.
buses/coaches, sleepers, semi sleepers, 2+1 executive
coaches, ordinary buses, double-decker buses and also bus
body frames according to the choice of individual customers.
The transport vehicles being manufactured include trucks,
trolleys, tippers, dumpers and reefer trucks for transporting

perishables and also some heavy engineering machines like

small bulldozers, earthmover, etc.
Kun Automobiles was hit hard by the hard by the global
recession in the automobile industry, which lasted from 1998
to 2000. In September 1999, Kun suffered a 10% drop in its
sales. The downturn in the automobile industry has forced Kun
to lay off some people and reduce the number of work days.
In order to reduce the cost of operations, Kun began to improve
its systems and processes. The firm hired an SCM consultant to
revamp the companys existing practices. The consultant found
a major problem with the inventory management of the firm.
Both the raw materials and finished good inventories were
high. The problem was aggravated by recession which
increased the costs and so it had to store the unsold vehicles in
different warehouses.
The consultant suggested that Kun reorganize its Supply Chain
Management system and streamline its production system. The
raw material ordering and the production processes should be
in accordance with market requirements. It required an online
interface between the marketing, sales and production
Following his advice, Kun established a network between
dealer showrooms and the production plants. The new
production process was based on the pull system whereby the
company manufactured products only according to demand.
Thus, it was able to reduce its inventory carrying costs and
increase customer satisfaction through customized products..
By 2000, the company began to operate 7 days a week. The
working capital requirement of the firm was reduced by around
50 crore. Due to the companys aggressive cost-cutting
measures, it was able to increase its reserves by around 10
crore. This was possible due to timely implementation of
supply chain management in the company.
Answer the following questions:1) How can Kun Automobiles set up supply chain
management processes to ensure the successful
implementation of SCM?
2) Discuss the advantages of pull system over the push